8:41pm: Jonathan Feigen of the Houston Chronicle writes that the second year of the deal is a team option, instead of a player's option as had been originally reported. Team options on veteran contracts are rare, so perhaps year two is simply non-guaranteed.

AUGUST 1ST, 6:37pm: Houston GM Daryl Morey took to Twitter to announce Garcia's official signing, which had been held up as Garcia traveled overseas.

JULY 6TH: The Rockets have re-signed guard Francisco Garcia to a two-year, $2.6MM deal, according to Adrian Wojnarowski of Yahoo Sports (on Twitter). Marc Stein of ESPN.com (Twitter link) first reported that the two sides were nearing agreement. Garcia will have a player's option in the second year of his new deal and will also have bird rights after year one, Wojnarowski tweets.

Houston decided against picking up their costly club option on Garcia but still wanted him back in the fold. Rather than pay the 31-year-old swingman $6.4MM, the club will get him back for a fraction of the price. Garcia had interest from teams looking for a solid wing defender who could also shoot it from three point range comfortably, including the Knicks and Lakers.

As shown in the Hoops Rumors Agency Database, Garcia is represented by Aaron Goodwin.